Multicultural News

Old National Bank settles loan discrimination lawsuit, agrees to plan supporting Black homeownership

INDIANAPOLIS (WISH) — A lawsuit alleging home loan discrimination against Black people has been settled. News 8 first covered the Fair Housing Center of Central Indiana’s lawsuit against Old National Bank in October.

In a nutshell, the settlement aims to counteract lending disparities for Black residents in Marion County looking to buy a home. According to the original lawsuit, Black people accounted for less than 2% of all mortgage loans Old National approved in a one-year period.

For generations, Black people’s access to home ownership had a narrow scope. Redlining — a system that kept Black people in certain geographic areas — is blamed for much of it.

While redlining isn’t legal, some believe the current systems in place still keep Black people and other minorities from accessing home loans as easily as their white counterparts. Although not connected to the case, News 8 recently spoke to state Senator Greg Taylor.

“You had redlining. And you had the situation where you have people get appraisals. And one appraiser sees them. And then they have a white person show up and their appraisal goes up 70%,” Taylor said.

The lawsuit filed by the Fair Housing Center of Central Indiana claimed Old National Bank treated Black potential homeowners differently, even closing bank branches in predominately Black neighborhoods.

As part of the settlement, Old National Bank has agreed to originate more than $27 million in loans to qualified Black applicants and contribute more than $3 million to create programs to help Black home seekers secure mortgages, along with other support over three years.

The FHCCI hopes more banks will follow suit, saying in a statement, “We encourage other area lenders to ensure they are meeting the mortgage needs of the underserved and those still living with the historic disparities that have kept far too many Hoosiers of color from the opportunity of homeownership.”

Another part of the settlement include further redlining assessment of housing markets in other cities like Fort Wayne and Evansville.